Sample Essay

The other issue that is faced by the automobile manufacturing companies pertains to the continuous pressure that is invoked on them to reduce the costs of their operations and their end products. The Japanese and the Chinese automakers have become very efficient at mass producing the customized cars for the buyers in the market. This puts the other automakers at a disadvantage that are not able to match the high efficiency the low ticket price of the Asian counterpart. As a result the American and western automobiles designed for the masses and the general market tend to suffer losses in terms of low market share. Moreover it is not possible for the automakers to keep on reducing their costs by cutting down overhead and fixed costs. The automobile manufacturers have to reevaluate their businesses and implement lean operations to take advantage of realistic costs savings.

A trend that has been identified though the research is that the there is an increasing trend toward the modularization in the supply chain management. According to these trends the suppliers take on greater responsibility of manufacturing the small components and integrating the various related components to the degree that relatively large pre assembled components of the automotive vehicle are supplied to the car manufacture. The car manufacture in turn only has to assemble the relative large or modular components of the automotive vehicles. This decreases the time taken for production as well as reduces the need for excessive movements or communication between the supplier, the vendor and the automotive manufacturer. The disadvantage of this is that in the short run the roles in the supply chains are defined and the production is contradicted in terms of productivity and rate. However in the long run the modular approach or the cell based approach is much more beneficial for all the parties concerned with the management of the supply chain.

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